E-Retailing

Traditional Retailing

Retailing is the process of selling products or services to

consumers for their non-business use.

Product satisfaction and value satisfaction is essential.

What is E-Retailing

Shopping through the Internet and other media forms.

Anything anywhere at the click of a button.

Anything anywhere refers to products and services

Commonly known as e-tailing, electronic retailing.

 E-retailing

E-retailing is B2c(business to customers)business model that

executes a transaction between businessman and final customer
Subset of e-commerce

e-tailers
Retailers who sell over the Internet
 E-Retailing Business Models
direct marketing
Broadly, marketing that takes place without
intermediaries between manufacturers and buyers; in
the context of this book, marketing done online between
any seller and buyer
 E-Retailing Business Models
Direct Sales by Manufacturers
Sellers can understand their markets better because of the
direct connection to consumers
Consumers gain greater information about the products through
their direct connection to the manufacturers
 E-Retailing Business Models
virtual (pure-play) e-tailers
Firms that sell directly to consumers over the Internet without
maintaining a physical sales channel
Low overhead costs
General purpose or specialized
click-and-mortar retailers
Brick-and-mortar retailers that offer a transactional Web site
from which to conduct business
Sells in stores, via phones, over the Internet, via mobile devices
 Channels of E-Retailing
Single channel e-retailing
Multi channel e-retailing
 Single channel E-Retailing
Retailers that sell products solely on the Internet, benefit from their
focus on reaching their consumer targets, because they dont have to
manage the competition for company resources.
many e-retailers are doing well by taking advantage of niche markets
and connecting with their customers. Web-only retailers are especially
good at being found by their potential customers, and many of them are
gaining expertise in marketing through online social networks.
social media interaction has spread rapidly to older users, it is younger
consumers who interact on the channels that drive sales growth at
niche retailers such as Nasty Gal Inc.
 Multi channel Retailing
Multi-channel retailing is a marketing strategy that offers your
customers a choice of ways to buy products.
A true multi-channel strategy covers purchases from a store,
purchases from a website, telephone ordering, mail orders, interactive
television, catalog ordering and comparison shopping sites.

Objective of Multi-Channel Retailing:

The aim of a multi-channel retailing strategy is to maximize revenue
and loyalty by offering your customers choice and convenience.
 Multi channel Retailing
Multichannel retailing is the merging of retail operations
in such a manner that enables the transacting of a
customer via many connected channels.

Channels include: retail stores, online stores, mobile

stores, mobile app stores, telephone sales and any other
method of transacting with a customer.
 Changing dynamics of Retail
Industry
Constant connectivity, contextual relevance, and a multi-screen world are
changing the concept of shopping
Consumer no longersee a distinction between online and traditional
shopping. Whether its searching on a laptop, browsing main street shops or
hanging out at the mall its all shopping. To adapt to the competitive new
reality, smart retailers are drawing on classic retailing truths of the past and
augmenting them for the now.
Innovative retailers are embracing this new reality,
using digital to extend their storefronts . These are top five observations on
how shopping has changed and suggestions for how marketers can adapt to
join the retail revolution.
 1. Shoppers know as much as
salespeople
Then:
People came into stores with little to no knowledge and relied on a salesperson to
advise them on what to buy.
Now:
Todays shoppers have become accustomed to doing their own research to get the
maximum value out of every dollar they spend, and to feel secure about the purchases
theyre making. With this power shift comes a great opportunity for retailers; those that
use tools and insights from the web have the opportunity to close the gap between the
smart online consumer and the offline retailer, and to stand out in a competitive
marketplace. Every moment in aconsumers decision journey matters. To win these
moments, smart retailers need to be there when inspiration strikes consumers and as
they start researching purchases online.
 2. Retailers can deliver personal,
relevant suggestions at scale
Then:
Retailing began with shopkeepers who would welcome in people from the neighborhood and then come to
learn their customers needs and preferences.
Now:
In our constantly connected world, a device is just a proxy for what really matters getting to know your
customers. Devices providecontext, helping us learn what matters to a consumer in a particular location
and at a particular time. Coupled with the intent provided by search, this is incredibly powerful. It can
help retailers deliverrelevantsuggestions, essentially recreating those shopkeeper conversations at
scale. The right message at the right moment is the next level in customer service it can quickly and
easily turn intent into action.
Context also allows retailers to better than ever anticipate what a customer might need based on when,
where and how they arrive at their site and help them decide how to respond to them. People are
constantly looking for product information, deals, local availability and local discounts online and
retailers who arent there to supply the right information when people raise their virtual hand will lose
out
 3. Mobile devices drive foot traffic
to stores
Then:
Finding the right store and the product you needed depended on familiarity, or serendipity.
Now:
innovative retailers are integrating mobile into their store experience. When shoppers search for a
store name or category, they expect to see a map with directions, a phone number that they can
easily click-to-call, or special offers that match their location and time of day. Adidas worked with
their agency iProspect to evaluate how mobile clicks on their store locator links were driving in-
store sales, and found that for a mobile investment of $1 million, the value brought by store locator
clicks in mobile ads generated an extra $1.6 million in sales.
The search element of shopping doesnt end once the customer walks into a store. At some point,
weve all been lost in the supermarket, searching the aisles for an elusive item. Mobile can be a
map, a shopping list, a personal shopper, a salesperson and a product finder all at once.
 4. Opinions carry more weight
than ever
Then:
Retail therapy was an activity shared by friends and family and word of mouth was a social
force that transformed new products into must-haves and small shops into retail empires.
Now:
This is truer than ever. With YouTube and social networks like G+, people are now sharing
their opinion on products not just with a group of friends, but with millions of people. This is
why Google Shopping incorporates reviews and introduced shortlists to make it easy for
people to discuss products and purchases with friends and family. Smart retailers are
recognizing the opportunities that lie in digital where instead of basing campaigns on the
broadest reach possible they can now zero in and speak directly with the individuals, or
communities of fans, who love their products most. Retailers are also seizing the
opportunities around online comments by advertising against terms like reviews and
working to promote the positive and counteract the negative.
 5. Products can jump off the
screen
Then:
The internet was fine for researching, but there was no replacement for holding, feeling,
inspecting a physical product on a store shelf or showroom floor.
Now:
Interactive video, 360 views, gestural controls are just a few of the options bringing products alive
on customers multiple screens. Each digital stride opens exciting opportunities to close the gap
between an on-screen image and that experience of holding a product in a store. Google Shopping
has introduced 360-degree imagery to some product sets to give shoppers a better sense of what
an item really looks like. Some innovative retailers are even offering shoppers virtual try-ons. Eye-
glasses retailer Warby Parker, for example, invites customers to mix and match frames against
their photo. When retailers showcase products online in a unique way, they create opportunities
for customers to interact with products on an emotional level. When consumers emotions are
activated, their desire to buy is sparked. We are only beginning to see the possibilities.
 Strengths of Online Retailing
1. Easy access to market -Online marketplaces such as eBay and Amazon allow anyone to
set up a simple online shop and sell products within minutes.
2. Reduced overheads - remove the need for expensive retail premises and customer-facing
staff, allowing you to invest in better marketing and customer experience on your e-
commerce site.
3. Potential for rapid growth -With a good e-marketing strategy and a plan a scale up
order fulfillment systems, we can respond and boost growing sales.
4. Widen the market / export ability to expand market beyond local customers very
quickly.
5. Customer intelligence - Ability to use online marketing tools to target new customers
and website analysis tools to gain insight into your customers needs.
6. Communication with Indirect Sales Channels - Through technologies such as email
and customer chat applications, online retail operations are able to quickly relay
information to customers and suppliers.
 Strengths of Online Retailing
7. Metrics and Marketing - ability to integrate analytics software that tracks the
behavior of visitors to site.
8. Save Time - shoppers can purchase his shopping orders and instantly move to
other important things, which can save time.
9. Save Fuel there is no need for vehicles, so no purchase of fuel necessary.
10. Save Energy customer do not need to waste their precious energy when
buying.
11. Comparison of Prices It is very straightforward to conduct price
comparisons from one online shopping website to another.
12. 24/7 Availability The availability of online stores give the freedom to shop at
shoppers own pace and convenience.
13. No Waiting in Lines
14. Easy to Search Merchandise You Want to Buy
 On-line mercantile models from
customer perspective
The on-line consumer expects quality, convenience, value, low price and control. To meet
these expectations and understand the behavior of the online shopper, there is a need for a
business process model that provides a standard product/services purchasing process from
an interactive services and merchandising point of view.
Consumer mercantile activities can be grouped into three phases prepurchase preparation,
purchase consummation and postpurchase interaction.
The prepurchase preparation phase includes search and discovery for set of products in the large
information space capable of meeting customer requirements and product selection from the smaller set of
products based on attribute comparison.
The purchase consummation phase specifies the flow of information and documents associated with
purchasing and negotiation with merchants for suitable terms, such as price, availability, and delivery
dates; and electronic payment mechanisms that integrate payment into the purchasing process.
The post purchase interaction phase includes customer service and support to address customer
complaints, product returns and product defects
 1. Pre-Purchase Preparation
From the consumer point of view any major purchase can be assumed to involve some amount of pre
purchase deliberation. Pre-purchase deliberation is defined as elapsed time between the consumers
first thinking about buying and actual purchase itself. Information search should constitute the
major part of duration but comparison of alternatives and price negotiations would be included in
continuously evolving information search and deliver process. To deliberate, consumers have to be
watchful for the new or existing information which are essential for purchase decision process.
Information on consumer characteristics with reduced purchase deliberation time can be quite
valuable when attempting to target, selective communications to desired audience properly. Thus not
much attention have been paid to this important research area which may dictate success or failure
of online shopping. Consumers can be categorized into three types:
i. Impulsive buyers: Impulsive buyers: these buyers purchase the product quickly.
ii. Patient buyers: Patient buyers: who purchase products after making some analysis or
comparison.
iii. Analytical buyers: Who do substantial research before making the decision to purchase product
or services.
 2.Purchase Consumption
After identifying the product to be purchased by the buyer and the seller must interact in some way ( e-mail, on-
line) to carry out the mercantile transactions. The mercantile transaction is defined as the exchange of information
between the buyer and seller followed by necessary payment depending upon the payment model mutually agreed
on, by exchanging currently i.e. backed by the third party such as the central bank, master card, visa card etc. A
single mercantile model will not be sufficient to meet the needs of everyone. In very general terms a simple
mercantile protocol would require the following transaction where the basic flow remains the same .
i. Through e-mail, online the buyer contacts the vendors to purchase a product or service. This might be done online through e-mail
(or) through e-catalogue etc.
ii. Vendor states the price.
iii. Buyer and vendor may or may not engage in a transaction.
iv. If satisfied buyer authorizes payment to the vendor with an encrypted transaction containing the digital signature.
v. Vendor contacts the billing service of the buyer to verify the encrypted authorization for authentication.
vi.Billing service decrypts the authorization and checks the buyer account balance and puts a hole on the amount transfer.
vii. Billing service give the vendor green signal to deliver the product.
viii. On notification of adequate funds to cover financial transaction, vendor delivers the goods to buyer or in the case of information
purchase provides a crypto key to unlock the file.
ix. on receiving the goods the buyer signs and delivers receipt. Vendors then tell billing service to complete the transaction.
x. At the end of the billing cycle buyer receives a list of transactions.
 3. Post Purchase Interaction
As long as there is payment for services there will be references, disputes, other
customer service issues that need to be considered. Returns and claims are an important
part of purchasing process that impact the administrative costs, scrap and transportation
expenses and customers relations. To overcome these problems many companies design
their mercantile process for one way i.e., returns and claims must flow upstream.
The following are the complex customer service challenges that arise in the customized
retaining which have not fully understood or resolved.
i. Inventory Issues: to serve a customer properly a company should inform a customer right from when
an item is ordered to it is sold out, otherwise the company will have a disappointed customer.
ii. database Access and Compatibility Issues: unless the customer can instantly access all the computers
of all the direct response vendors likely to advertise on the information super highway on a real time
basis, with compatible software to have an instant access to the merchants inventory and database.
iii. Customer service issues: Customers often have questions about the product such as colour, size,
shipment etc. and other things in mind can resolved only by talking to an order entry operator.
 Challenges Facing the Retail
Industry
The consumer packaged goods industry is an ever-moving,
ever-changing mechanism. Adaptation is key, and with
technological developments and rising consumer
demands, it can be hard to keep up.
That being said, these changes are not the only challenges
facing the retail industry. Here is a list of some of the
others along with their few solutions to help make these a
little less difficult to face.
 Employee turnover
Problem: This is a problem every retailer faces - it is a
major problem in the retail industry - and often there is
little that can be done to stop it. When an employee
enters, then leaves your company, this can create
problems for your human resource department, and
means a loss of time and resources spent continually
hiring and training new employees.
Solution: 3rd party people support. A company that can
provide short notice employees with training and
experience can help you mitigate those costs and ensure
excellent service and assistance.
 Auditing
Problem: For brands located at retail, keeping on top of
what is going on on the store floor can be challenging.
This is why auditing is another challenge that faces the
retail industry on a regular basis.
Solution: You cant be everywhere at once, but a
merchandising company that offers this service can. Not
only will this provide you with up-to-date data about
competitors price points, you can also ensure that
customer satisfaction is high - and if not, amendments can
be made to improve the situation.
 Allery alert/product recalls
Problem: Improper labelling, errors with packaging, issues with
ingredients; these are all accompanied by costs for remedy and time
and resources spent. They can also mean time with empty space on
the shelf, which is never a good thing in retail.
Solution: Emergency response services for retail. When you are made
aware of a product recall, whatever the reason, manage the outcome
to ensure a positive result. If possible, consider bringing in a team to
fix the problem on the spot, rather than worrying about shipping
product back to the warehouse. This saves money and time and also
keeps the empty space to a minimum.